Thursday, November 30, 2017

Why hasn’t the Malaysian Anti-Corruption Commission investigated Johor MB, Datuk Seri Khaled Nordin?

The whole of Malaysia have now seen the MACC investigation documents which have been leaked this week, implicating corruption by the Johor Menteri Besar (MB), Datuk Seri Khaled Nordin.  The documents comprised of the witness statement taken by MACC during its investigation into Johor state executive councillor Datuk Abdul Latif Bandi. The documents come from the Commission’s interview with Amir Shariffuddin bin Abdul Raub, who was also charged with Datuk Latif in April this year.

MACC had investigated the two in relation to a land graft scandal, where the two had received multiple bribes amounting to RM30 million from developers in return for their assistance in changing the status of bumiputera lots as well as reducing the 7.5% charge levied upon developers.

As shocking as the initial news of their investigation was, the biggest shocker is found in the witness statement (relevant pages attached), where Amir admitted to delivering nearly RM12 million in cash to the Menteri Besar in return for the MB’s help in the necessary land changes.

The MACC has effectively confirmed the authenticity of these documents when Deputy MACC commissioner Dato’ Sri Azam Baki’s said yesterday that the documents were sent to the lawyers of one of the defendants in the case.

Now that the MACC has acknowledged the documents, they will have to explain their failure to investigate the MB, who is similarly implicated according to the witness statement.

The first account given by Amir was for an alleged transfer of RM4 million in September 2013. That kickback would come from the developer MB Land, which had solicited Amir’s help in converting the land status and waiving the charge.

Following that successful deal, Amir says he was approached by other developers for similar favours. Each of these deals would also include multiple alleged kickbacks to the Mentri Besar. For a deal by IJM Group, Amir stated that he instructed his lawyer Zul Azam to cash in a cheque worth RM1 million. He then handed over the money in a backpack as instructed by Datuk Khaled. That was done on 14 November 2013.

Subsequently, Amir also admitted to paying the MB, a total of RM9.7 million in cash over 10 transactions between 16 April 2014 and 4 May 2016. Those payments were for facilitating a land deal for Scientex Sdn. Bhd. The report specifically highlighted 5 of those transactions made on 16 April 2014, 1 October 2014, 20 October 2014, 2 December 2014 and 17 June 2015.

With such concrete evidence in front of their own noses, why hasn’t the MACC investigated Datuk Seri Khaled Nordin?

Worse, the MACC has decided it was more appropriate to ‘kill the messenger’ by filing a police report over the purported leaks.  In turn, the Johor state assembly (DUN) disgraced itself by acting in cahoots in its attempt to silence the issue by throwing out Senai state assemblywoman Wong Shu Qi in the DUN.

In fact, all the companies which have paid the alleged bribes must be investigated, and if guilty, charged and punished as well.  After all, the MACC has often opined that the giver of bribes is as guilty as those who receive.

The question is, is the Johor MB immune to investigations and prosecution just like Dato’ Seri Najib Razak is, in the case of the multi-billion ringgit scandal, 1MDB?  While the MACC abdicated from its responsibility to investigate the Prime Minister by shoving the responsibility to the Police, what is MACC’s excuse this time?

Where is the ‘all hands on the deck’ haste and urgency in the MACC just like the way it dealt with alleged and even trumped up corruption charges against opposition figures?  Or will this remove, once and for all, the façade that the MACC is an independent investigating institution which will act without fear or favour; and that it is merely an extended paw of UMNO to oppress the opposition while protecting its political masters?

Whose head should roll when East Coast Rail Link’s outrageous claims of profitability fail to materialise?

The East Coast Rail Link (ECRL) project which was awarded without any tender to China Communications and Construction Company (CCCC) has been criticised for being overly expensive at RM55 billion and potentially soaring to RM70 billion according to some reports. The government’s own consultants had estimated the cost to be only RM29 billion.

 Yet despite the heavy price tag, the Deputy Finance Minister Datuk Othman Aziz told Parliament on 28 November that the project was expected to “break even from the operational aspect”, after just 8 years of operation in 2032.

The Deputy Minister’s statement is wildly ambitious on many counts.

Firstly, we have to assume that the Deputy Minister meant that “break even from the operational aspect” meant that it does not cover the enormous cost of constructing the ECRL, which is covered entirely by debt.

So far, the government has said that 85% of the project will be financed by China’s Export-Import Bank (EXIM), with a soft loan carrying an interest rate of 3.25% per annum repaid over 20 years with a 7-year moratorium. The remainder 15% will be financed via a sukuk issuance.

Therefore, the annual repayment of the ECRL borrowings will amount to an estimated whopping RM3.7 billion.  This simply means that even if the ECRL is to “break even from the operational aspect” after 8 years, it will still be suffering cashflow losses of some RM3.7 billion annually!

However, even Datuk Othman Aziz’s claim of “break even from the operational aspect” is preposterous to begin with.

Datuk Othman claimed that the government was projecting a revenue of RM2.9 billion to be recorded in 2024.  But this amount is more than 4 times the current revenue of KTM Berhad today!

The ridiculous revenue projection is achieved with a fantastical projection of cargo the ECRL will transport. As raised by economist KS Jomo, the ECRL is expecting to carry 60 million tonnes of freight yearly by 2032 even though KTM’s existing freight haulage is only 6 million tonnes across the entirety of its existing rail network from Padang Besar to Johor Bahru.

How exactly is the ECRL expecting to see 10 times the amount of freight currently being transported on the matured and industrialised west coast of Peninsula Malaysia?

The BN Government must stop trying to mislead the people with fanciful daydreams and start providing data, analysis and studies to back up its wild and preposterous claims.  Who will also take responsibility if the ECRL fails achieve any where close to the projections above?  Will the Deputy Minister take responsibility by resigning from his position?  Or will it be the Prime and Finance Minister, Dato’ Seri Najib Razak who owns the ECRL brainchild and awarded to contract to CCCC?

The rakyat has the right to know the details because it will be our children and grandchildren who will have to bear the reckless debt burden of the current government should the project fail to meet its lofty targets.

Wednesday, November 29, 2017

Treasurer-General Tan Sri Irwan Serigar’s continued stalling over decision to appoint Bandar Malaysia master developer exposes that Ministry of Finance has not received any firm bids for the project

Ministry of Finance (MOF) Treasurer-General and Bandar Malaysia chairman Tan Sri Irwan Serigar continued to ask Malaysians to wait and see for the outcome of Bandar Malaysia’s call for a new master developer. When launching online radio station eFM yesterday, Irwan told reporters to “wait, the time will come,” when asked about the status of Bandar Malaysia’s call.

The call for a master developer followed the collapse of the RM7.41 billion deal with a consortium led by Iskandar Waterfront Holdings (IWH) to acquire a 60% stake in Bandar Malaysia. Following that collapse, Bandar Malaysia Sdn. Bhd., the wholly-owned MOF Inc. company and former 1MDB subsidiary, announced that it was going to be opening a tender for a master developer for the Bandar Malaysia project.

The new tender was going to include more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and needed to have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.

When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.

On August 23, Tan Sri Irwan said that 6 companies had ‘expressed interest’ and had visited the site. “We took them for a site visit and they need to submit their proposal by the end of this month,” he said.

The Malaysian Reserve then reported on October 31 that Tan Sri Irwan said the announcement for the master developer would be “coming soon, coming soon”.

On November 8, I had asked the Minister of Finance to state how many companies had submitted finalised proposals for the re-tender of the Bandar Malaysia project, how many of those companies were Fortune 500 companies and when the tender decision would be announced.

He again merely responded that 8 companies which had met the criteria had “expressed their interest” in becoming the master developer.

It has now become quite obvious that since June this year, the only progress we have made is purportedly 6 to 8 companies have “expressed interest” in Bandar Malaysia despite a decision which was to be “made by July 14”.

We call upon Tan Sri Irwan Serigar to confirm if in fact, there have been no firm bids tabled by any so-called Fortune 500 company to acquire and develop Bandar Malaysia, especially not at the astronomical price demanded by the Ministry of Finance.

Tuesday, November 28, 2017

The biggest culprits to the supply-demand imbalances in the property market in Malaysia are none other than Government-linked Companies

The Cabinet has imposed a “temporary ban” approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million effective November 1.

The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. Bank Negara stated that the oversupply of properties in the country has been persistent over the past few years. Bank Negara themselves had raised the issue in their 2015 annual report.

In the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.

However, what Bank Negara and the Cabinet did not say was that among the biggest culprits causing the supply-demand imbalances in the property market are the Government-linked Companies (GLCs) and Government-linked Investment Companies (GLICs).

A report by The Star on April 6 this year highlighted the increasing involvement of GLICs in the property both directly and indirectly. EPF has been directly involved developing the new Kwasa Damansara township, which has a massive size of 2,300 acres and RM50 billion in gross development value (GDV).

Pemodalan Nasional Bhd (PNB) on the other hand, is developing the 118-storey Menara Warisan project next to the historic Stadium Merdeka. It will offer 4.3 million square feet of residential, hotel and commercial space.

PNB is also the single biggest shareholder of S P Setia, one of the largest, if not the largest property developer in Malaysia.  S P Setia is renown for some of the biggest luxury developments in the Klang Valley, including a 25-acres KL Eco-City, Setia Sky Seputeh and many others.

In addition, EPF and PNB jointly owns 63% of Sime Darby Bhd, whose property arm is another one of the largest property developers in the country.  The company has only recently launched its RM8 billion GDV AYLA Kuala Lumpur project which covers an area of 360 acres.

There is also the Bukit Bintang City Centre (BBCC) which sprawls over 19.4 acres with a GDV of RM8.7 billion. The project is spearheaded by UDA, a wholly-owned subsidiary of the Ministry of Finance.

No listing of high-end property projects in Kuala Lumpur will be complete without also mentioning the 76-acres RM20 billion GDV KL Metropolis project.  While on paper, it is developed by a private company, Naza TTDI, the project is in effect a controversial land-for-building deal with the Ministry of International Trade and Industry (MITI).

Elsewhere, Khazanah-owned UEM Sunrise also specialises in the high-end residential market in prestige locations such as Mont Kiara. In Johor, which was highlighted as having the largest share or 27% of all unsold properties in the country, UEM Land is developing 14 new projects which are all listed as high-end developments.

All of the above do not yet include the two mega-property developments linked to the scandalised 1Malaysia Development Bhd (1MDB) – the 70-acre Tun Razak Exchange (TRX) and the 486-acre Bandar Malaysia.

The issue here is two-fold. First, it is clear that GLCs contribute overwhelmingly to the glut which is threatening our property space in the country today.  No policy prescription without recognising and reviewing the role of the government, GLCs and GLICs has played in our “imbalanced” property development sector will be effective or successful.

The second more important economic question is, will the Government also be granting ‘ban’ exemptions to all these GLCs’ projects as it has done for TRX and Bandar Malaysia?  What then, will be the implication for the private sector in Malaysia?  Should they all just pack they bags and take their money to other countries to invest?

Sunday, November 26, 2017

The longer UMNO stays in power, the more UMNO will reconstruct Malaysia’s Constitution to erase the freedom and rights of Muslims and non-Muslims

After more than 60 years of the UMNO-led Barisan Nasional reign in Malaysia, there is now an undeniably increasing constriction of religious rights and freedom of all Malaysians.

Among Muslims, there is increasing control of what is deemed the sole interpretation of the scriptures, with no room for debate or discourse, academic or otherwise in the country.  We have seen various internationally renown Muslim scholars and thought leaders banned by the Malaysian authorities.

In 2014, Islamic scholar Ulil-Abshar Abdalla was banned from entering the country to speak at a forum on the threat posed by religious fundamentalism.  Ironically, the forum was being held at the headquarters of the Global Movement of Moderates established by Prime Minister Dato’ Seri Najib Razak himself.

More recently, Mustafa Aykol, renowned Turkish author and New York Times journalist attached to Wellesley College, Boston was arrested and detained for 18 hours in Malaysia for having purportedly given a “religious talk” without license.  The only problem to that charge is that he was merely participating in a roundtable intellectual discussion on the question, “does freedom of conscience open the floodgate to apostasy?”

His books were subsequently also banned by the Home Ministry as a “threat to national security”.  Not only foreign scholars have been targeted, progressive young Malaysian scholars such as Wan Ji Wan Hussin has also been arrested recently while his book, “Ulama Bukan Pewaris Nabi” was also banned.

On the other hand, conservative and controversial clerics such as Zamihan Mat Zin who, among other things, defended a Muslim-only laundrette was praised as an “asset” by the Home Minister, Dato’ Seri Zahid Hamidi.

The increasingly narrow interpretation of what Islam is and the outright condemnation of those who disagree, has also been matched over the past decade with the increasing attempt to demonise other religions, in particular, Christianity.

We have seen the confiscation of bibles, seditious and incendiary talks to incite hate against Christianity by renown fraudulent ‘scholars’ such as Irene Handono, as well as banning the use of the term “Allah” by other religions.

Christians are the convenient bogeymen for the UMNO politcal elites to continue to strike fear among their core Malay-Muslim supporters to ensure that all other transgressions by the Party, such as brazen corruption and outrageous scandals, will be set aside to face a concocted Christian threat head on.

However last week, the open attack in Parliament by Deputy Minister in the Prime Minister’s Department, Datuk Asyraf Wajdi that atheism is unconstitutional opens a whole new chapter in diminishing the religious rights of ordinary Malaysians.

He claimed that atheism should be outlawed because it will incite people to leave their religion or to profess no religion. As such, it violates Article 11(4) of the Constitution, which allows state laws and federal laws to control and restrict the propagation of any religious doctrines or beliefs among Muslims. He even said that “anyone who tries to spread ideologies and doctrines that promote atheism and similar beliefs, which tarnish the sanctity of other religions, can be charged under the Sedition Act.”

The Deputy Minister who apparently possess a Doctorate on Islamic Banking and Finance is talking utter rubbish.

Firstly, the Constitution clearly states “every person has the right to profess and practise his religion…”  How in the world did Datuk Asyraf interpret someone having “the right to profess” to everyone “must profess” in a religion?

When the Constitution says under Article 10, “every person has the right to freedom of speech” and “every person has the right to assemble peacefully without arms”, would the Deputy Minister with a Doctorate also interpret it as “everyone must speak (and hence cannot remain silent)” and that “everyone cannot refuse to participate in peaceful assembly”?

Of course not.  When someone “has the right to profess… his religion”, it clearly means that he has the freedom of choice to believe in a religion.  But it does not at any point compells him or her to adopt a religion!

In addition, an atheist or a free-thinker, by not believing in any religion or participating in any religious activities, does not make him or her, by default, run afoul of Article 11(4) which prohibits propagating other beliefs to Muslims.  That would be sheer illogical nonsense.

Unfortunately, propagating illogical nonsense isn’t illegal in Malaysia.  Hence such illegal nonsense is being abused by ruling political elite to strengthen their grip by striking fear into the hearts and minds of Muslims – to focus on the purported threat of Christianity, and now atheism; and of non-Muslims, by taking away their freedom, one bit at a time.

Friday, November 24, 2017

Ku Nan demonstrates “Malaysia Boleh” spirit by declaring Bandar Malaysia plans ‘approved’ even before master developer selection, to circumvent Cabinet luxury development ban.

Federal Territories Minister Datuk Seri Tengku Adnan Mansor has confirmed yesterday that the 1MDB-linked Bandar Malaysia and TRX would not be affected by the freeze on property approvals for condominiums, serviced apartments, offices and shopping complexes price above RM1 million.

He was responding to a question by PJ Selatan MP, Hee Loy Sian, when he said that the two projects had already received approval ‘in principle’ and could not be stopped from developing.

It is quite clear here that the government’s only principle here is to protect the interests of 1MDB. TRX and Bandar Malaysia are two of 1MDB’s largest assets that need to be developed if the fund wants any chance of staying afloat. They are also two of the biggest slated development projects in KL.

The amazing thing is, the Ministry of Finance has not even declared a winner to the tender for the master developer of Bandar Malaysia. The latest response from the Ministry of Finance last week is that there are 8 companies which have “expressed interest” in developing the massive 486-acres project. DBKL Mayor Tan Sri Mohd Amin had himself told Malaysiakini that they had yet to receive an application from Bandar Malaysia.

If exemptions from the freeze can be given just because of approvals had been given ‘in principle’, what worth is the freeze at all? Does this mean that other ‘planned’ high-end developments, which have yet to submit their planning applications, will also get exemptions?

These exemptions raise two worrying questions about the government’s planned freeze on high-end developments.

Firstly, it would mean that the effectiveness of the supposed ban on high-end project would be severely diluted.  Bank Negara’s report showed just how grave the supply and demand imbalance was, projecting 1-in-3 office spaces being vacant in the Klang Valley by 2021, if measures aren’t taken to control it. If this freeze on high-end developments is to be taken seriously at all, the government has to make sure it is fairly enforced across the board.

And secondly, 1MDB gets the special treatment which discriminates against all private businesses.

As per my previous statements on this issue, I reiterate that the purported ‘blanket ban’ against high-end projects with unit values above RM1 million is a hare-brained knee-jerk reaction which is faulty due to the unfair and substantial exemptions granted above.  In addition, the policy itself will not only fail to achieve its objectives because it is not properly targeted, it will create greater distortions in the market as well as turn away both domestic and foreign investors.

Thursday, November 23, 2017

Why are 1MDB-related projects given special exemptions despite Cabinet blanket ban on luxury property projects above RM1 million in unit values?

Last week, Dato’ Seri Johari Abdul Ghani announced the Cabinet decision on a “temporary ban” approvals for shopping complexes, offices, serviced apartments and luxury condominiums priced over RM1 million effective November 1.

The freeze came after Bank Negara’s report on the substantial supply and demand imbalance within the country’s property market. The report found that new property launches were skewed towards the high-end sector of the market.

Particularly in the Klang Valley, the report found that office vacancy rates had increased from 20.9% in Q1 2015 to 23.6% in Q1 2017. The situation is only set to get worse as there is an incoming supply of 38 million square feet of office space.

It has also been confirmed in various news reports that the Kuala Lumpur City Hall (DBKL) has received the above directive.

However, we are not sure if we should be shocked that the Mayor, Tan Sri Mohd Amin Nordin Abd Aziz announced yesterday that the prospective single largest high-end property development project ever in Malaysia – Bandar Malaysia is exempted from the ban.

Malaysiakini reported that although the Kuala Lumpur City Hall (DBKL) had yet to receive any application regarding the project, Mohd Amin said the freeze on approvals for condominiums, serviced apartments, offices and shopping complexes priced at RM1 million and above is not a blanket ban.

“We haven’t received any application from Bandar Malaysia. No, because it is not a blanket (ban). On certain developments, it can be approved,” he told Malaysiakini.

At the same time, it was announced yesterday that IJM would be building a new RM500 million office tower at Tun Razak Exchange after acquiring TRX City subsidiary Fairview Valley Sdn Bhd. Will this new tower, which will have a gross floor area of 560,000 square feet also be exempted from the ban?

Due to the size of these 1MDB-related projects, they will certainly exacerbate the property over-supply situation in the Klang Valley and effectively blunt the effectiveness of the Cabinet decision to ban high-end development projects.

More critically, if the 486 acres Bandar Malaysia and the 70 acres Tun Razak Exchange projects receive automatic exemptions from the ban – how is that fair to the rest of the property development industry in the country?

Clearly the “temporary ban” is a hare-brained which will fail to actually solve the “supply-demand imbalances” in our property sector. Worse, the investment and business community will only see the inconsistency and unfair policies imposed by the Government.  Can they be blamed if both the domestic and foreign investors take their money and invest in other countries?

Wednesday, November 22, 2017

Is the high-end property ‘freeze’ a case of a hare-brained attempt to hose down a fire which has already burnt to ashes, or worse, cause a flood and further add to the woes?

On 17 November, Bank Negara Malaysia (BNM) produced a report highlighting the mismatch in supply and demand of property developments in Malaysia.

The BNM Governor, Tan Sri Muhammad Ibrahim pointed out that the supply-demand imbalances in the property market has increased since 2015, pointing to the decade-high of unsold residential properties. There were 130,690 unsold units at the end of March this year, with 83% priced at above RM250,000.

The knee-jerk reaction to the alarming report was the announcement two days later by Second Finance Minister, Datuk Johari Abdul Ghani that the government had issued a directive temporarily stopping developments of shopping malls, commercial complexes and condominiums valued about RM1 million from November 1.

One can tell that it was a hare-brained policy attempt because the day after, the Works Minister, Datuk Fadillah Yusof said that the directive was not a blanket freeze and that approvals would be evaluated on a case by case basis.

Datuk Johari then added, on November 21, that the freeze would only affect projects that had not been approved and the length of the freeze would depend on a continued assessment of the situation.

The question is, how did the Government allow the situation to develop to such a state of gross mismatch in the first place?

Actually, the issue of imbalances in the property market was already highlighted by BNM in its 2015 annual report. And the oversupply in the housing market has since then almost doubled between 2015 and 2017.  In fact, Bank Negara’s figures for the property supply and demand come from the National Property Information Centre (NAPIC) located under the Ministry of Finance (MoF).

As the BNM Governor opined, “we have raised these issues for more than a year. Exposure of financial sector within this area is within a comfortable level. But if we're not careful, the oversupply could have a negative impact on the economy.”

Hence the question now is, given the fact that the milk is already spilled, will the seemingly drastic knee-jerk ban on luxury condominiums, shopping malls and commercial complexes solve the problem or trigger even more problems?

Investors, both domestic and foreign, will tell you that what they fear and hate more than bad policies are inconsistent, uncertain and ad-hoc policy-making.  The latter results in constant unanticipated changes and frequent policy U-turns which makes it impossible for business to plan their investments and measure their expected returns.

In this case, there are so many unanswered questions based on the Cabinet's hasty policy decision.

Has MoF asked the real estate sector – why is it that despite the excess supply of “luxury condominium”, developers continue to build them at that price?  Are Malaysian developers really that stupid to invest in projects which cannot sell?

Has MoF conducted a study to determine if a ban on the “luxury” sector will reallocate investments into the “affordable” property sector?  If it doesn’t, will the ban merely stop property and construction activities and consequently trigger an economic slowdown and lower employment opportunities?

One of the biggest questions that needs to be asked is, what is considered a “luxury” project?  The Bank Negara report used RM250,000 as the benchmark.  However, the Government’s own affordable housing agency PR1MA have properties priced between RM100,000 and RM400,000, although prices tend to be skewed more to the higher-end.  On the other hand, the latest MoF ban appears to apply to only properties priced above RM1 million.  Hence, are we prescribing medication to the wrong patient?

Worst, the blanket ban does not take into account of regional factors and imbalances.  The BNM Governor clearly stated that Johor is poised to have the highest number of unsold residential properties and potentially the largest excess supply of retail space. Hence is a nationwide ban of any kind the right prescription or will it instead cause economic distortions in other states and regions?

We call upon the Minister of Finance to provide not only clarity to the hare-brained “temporary ban” decision but also to justify how such a ban will actually solve the “supply-demand imbalances” in our property sector.  He should also take in cognizance of the fact that BNM’s 6-policy prescription to resolving the problem did not involve an outright ban on types of development.  Otherwise, the unintended consequences of such a crude policy prescription would worsen the effects on our already fragile economy.

Tuesday, November 21, 2017

The Minister of Finance should stop telling lies and giving excuses, and admit that Malaysians will never get to see any more audited financial statements for 1MDB and SRC International

Former Deputy Prime Minister, Tan Sri Muhyiddin Yassin had asked the Minister of Finance for the status of the much delayed financial statements for 1MDB.

In a parliamentary reply dated 16 November, the Minister of Finance responded that “on July 8, 2015, the police seized various original documents from 1MDB’s office.  1MDB’s management has contacted the police regarding the return of the company’s documents, but till today, the original documents haven’t been returned to the company”.

Therefore, since the last financial statement prepared by Deloitte Malaysia for the period ending March 2014, there has been no official audits conducted for the scandal-ridden company.  Worse, last year, Deloitte Malaysia has withdrawn its endorsement for the March 2013 and March 2014 financial statements.

This means that 1MDB has since March 2012, or more than 5 years ago, 1MDB has not filed any financial statements which have been endorsed by an external auditor.

This unprecedented delay was despite repeated deadline extensions granted to 1MDB by the Companies Commission of Malaysian (SSM) to file its annual reports.  And now the Minister of Finance tells us that it has completely given up and said that it cannot even provide a deadline.

If the Minister of Finance is indeed serious about 1MDB completing its audit process, why hasn’t he, who is also the Prime Minister ‘discuss’ this matter with the Royal Malaysian Police to work out an arrangement for the audit to be carried out?

Surely it cannot be too hard for investigators to allow the auditors to, at the very least, sight the documents needed? Moreover, the police have said that their investigation in 1MDB is now concluded and that they have returned their investigation papers to the Attorney-General’s Chambers. So why exactly are investigators still holding to these documents if it is necessary for the proper auditing of the company?

We are not asking for the Police to return, relinquish or destroy possible evidence in its hands.  We are merely asking for the Police to allow the statutory audit of 1MDB to be carried out.  The audit is of great urgency and importance as it will confirm if the allegations of billions of ringgit being misappropriated to fictitious investment accounts in various overseas institutions from Singapore to the British Virgin Islands and a little-known island-state of Curacao in South America.

It should be noted that even when the Auditor-General and the Public Accounts Committee was investigating 1MDB prior to 2016, 1MDB refused to even supply its management accounts, despite being requested to do so.

The Finance Minister’s complete lackadaisical attitude towards the audit of a state-owned company with nearly RM40 billion in debts shows that it is a cover up to prevent the truth from being discovered.

The fact that 1MDB cannot produce any audited financial statements since March 2012 further rubbishes Dato’ Seri Najib Razak’s pre-budget defence and praise of 1MDB, and the audacious claim that 1MDB will soon “return to profitability”.  It can’t even produce its accounts, what profit is the Prime Minister talking about?

A month after millions of private and confidential data were hacked and stolen, and all the Deputy Minister of MCMC can tell us is to change our passwords regularly?

Yesterday, Deputy Minister of Communications and Multimedia Datuk Seri Jailani Johari told Malaysians to change passwords regularly and to not reveal personal information over the internet in order to protect themselves against cyberattacks.

Sebagai pengguna, seharusnya memastikan, seboleh-bolehnya, jangan kongsikan apa sahaja maklumat mengenai kita di dalam media sosial yang kita punya. 
Sebaik-baiknya, sekurang-kurangnya tiga bulan sekali, kita tukar kata laluan. Dan kalau boleh kita gunakan alphanumeric numbers.  Dan kita juga jangan sewenang-wenangnya memaut mana-mana pautan yang kita rasakan tidak sesuai kerana ia akan memberikan kesan kepada kita.

The Deputy Minister said this in Parliament in response to a question on the steps taken by the Government in the cases which involved leakage of confidential personal data.

Datuk Seri Jailani’s comment is dangerously simplistic and avoids the government’s role in ensuring our cyber security.

For example, the recent sale of millions of breached personal data shows just how vulnerable Malaysians are to having our information stolen – and it has absolutely nothing to do with the need for users to change passwords regularly.

The Ministry’s response to this critical issue has also revealed not only how misplaced their priorities are, it also revealed that the Government is utterly clueless as to what to do to address the problems.

Rather than assuring people of an investigation, the MCMC’s first move was to take down the initial news report of the sale. Last week, it blocked the website which allowed users to key in their IC numbers to check if their details had been found in the data breached from Malaysian telco companies.

The question that keeps re-emerging is who the Government is really protecting with these measures. It appears that they are more inclined to protect the reputation of the huge corporations which were entrusted with our confidential data by covering up the scandal, instead of taking the bull by the horns to protect everyday Malaysians.

Taking those precautionary measures, as advised by the Deputy Minister, would have nothing to protect Malaysians from having their personal data being sold.

What’s worrying is that Malaysia was revealed last year, in a survey done by global cyber-security firm Kaspersky Labs, as having the most compromised servers in Southeast Asia.

Rather than constantly telling consumers to be more careful, the government needs to be urging data holders including themselves to improve their own standards instead of passively monitoring and not acting on these severe breaches.

Sunday, November 19, 2017

Dato’ Seri Najib Razak should explain why he insists on changing MRT3 project delivery model despite singing praises of the purported MRT1 “success story”

In his speech at the 2017 SME Annual Conference last week, Najib said that the MRT costs were kept “below budget” because of the “high quality of local companies” that were chosen through its “rigid and transparent tender exercise”.

If that’s the case, then why are we seeing a tender exercise for MRT3 with questionable transparency, thin on project specifications and with financing requirements that would disqualify all of the “high quality local companies” that Najib has praised?

MRT Corp announced last week that the MRT3 project would be awarded as a turnkey contract rather than the project delivery partner (PDP) model used for MRT1 and 2. This means that the tender process for MRT3 consists of a single tender estimated to be worth between RM40 - 50 billion.

By comparison, the tender process for MRT1 and 2 was made up of multiple tenders for different parts of the project led by a “Project Delivery Partner”. For MRT3, these smaller packages will all be subcontracted by the main turnkey developer.

In addition, the MRT3 tender requires any tenderer to provide financing for the project of no less than 90% with a repayment period of no less than 30 years on top of an 8 year moratorium. If the project costs RM50 billion, that means the tendering company or consortiums would need to provide at least RM45 billion in financing.

Dato’ Seri Najib Razak have argued that MRT3 may save on financing cost.  However, what is the point of lower financing cost, if the actual cost of the project becomes substantially higher resulting in much higher cost of project despite the lower financing cost?

There is no question there are no companies in Malaysia who are able to provide that scale of financing despite having all the necessary qualities and technical skill-sets to complete the project. Financing for MRT1 and 2 was undertaken by MRT Corp through DanaInfra, which freed bidding companies from having to provide their own financing options.

Worse, the tender period itself is a ridiculously short 45 days for a massive RM50 billion project.  In fact, even the MRT alignment of the line has yet to be announced by MRT Corp.

This raises a further question – is the entire MRT3 tender exercise skewed in favour of particular parties?  Why is Dato’ Seri Najib Razak going out of his way to contradict himself?

As I’ve stated previously, all the above questions only go to prove that there’s more than it meets the eye with the latest ‘mysterious’ decision to switch the project model from the much ‘praised’ PDP to the turnkey cum financing model.

Friday, November 17, 2017

The Government should call ERL’s bluff and allow ticket prices to hike instead of bailing out the company with a 30-year extension

The Deputy Minister of Transport, Aziz Kaprawi, told Parliament this week that the Government was extending the concession period for the ERL service by 30 years. This will double the concession period for the ERL, which was meant to expire in 2029. The concession for the ERL is held by Expressrail Link Sdn. Bhd (ERL) and was signed in 1997.

The Deputy Minister has stated that concession extension is the Government’s compensation to ERL for rejecting its last three scheduled fare hikes. The ERL Express service is currently priced at RM55 but should be priced at RM74 according to its initial concession agreement. It is meant to increase again in 2019 to RM97 and another increase was due in 2024 bringing the fare up to an astonishing RM126.

ERL had previously demanded RM2.9 billion in compensation from the government due to its inability to raise fares based on its initial schedule. However, the Auditor-General’s report found that ERL’s revenue was between 11.5% and 13.7% of its projected revenues.  Hence why should tax-payers compensate ERL for revenues which were outrageously inflated anyway?

On the contrary, instead of trying to stop the fare hikes, we call upon the Government should “approve” the fare hike per the concession agreement, should ERL chooses to implement them.

This is because should ERL chooses to hike the fares further, their ridership will fall even further than its already low levels today.  The Deputy Transport Minister in his parliamentary reply on 15 November confirmed that when the ERL increased its fares from RM35 to the current RM55 fare on 1 January 2016, the number of passengers dropped by 19% to 8.9 million. 

Any ordinary person with a sound mind would be able to tell you that should ERL choose to increase its fares further per the above schedule, the number of riders will drop even more drastically. And by Datuk Aziz Kaprawi’s own admission, ERL had suffered 6 continuous years of post-tax losses from 2009 to 2014.

The reason is simple, there’s now ample competition in transport service availability to both KLIA and KLIA2.  The same journey using GrabCar or Uber ride service will cost RM65 and approximately RM75 respectively.  If the rides are shared, then the fares are significantly cheaper than ERL.

Hence the Government should call ERL’s bluff and allow them to proceed to raise its fares.  If ERL does so, and collapse financially due to the lack of passengers, the Government has the right under the concession agreement to take back its service.

However, if ERL chooses not to hike its fares despite being allowed to do so by the Government, then the tax-payers will be absolved of any obligations to compensate ERL!

The question hence for the Government is, is its rejection of fare hikes an honest attempt to protect the rakyat, or its really a masked attempt to bail out ERL and save a crony-linked company?

The ERL concession was awarded in 1999 through a direct negotiation with the ERLSB, whose largest shareholder is the YTL Group. By choosing to extend ERLSB’s concession, the Government is helping ensure that those lopsided terms continue.

The ERL has taken a business risk with seemingly lucrative terms – including a fee of RM5 and RM1 to be paid for every international and domestic traveller respectively using KLIA or KLIA2, regardless of whether they use the ERL.  Since 2002, this has amounted to RM741 million.

However, now that business apparently isn’t so good, why should tax-payers step in now to bail out the company shareholders?

Thursday, November 16, 2017

Why is Malaysia the most “man man” (slowly, slowly) in the world when the rest of the world have been very “kuai kuai” (quickly, quickly) in persecuting those who have been complicit in stealing billions of dollars from Malaysian tax-payers?

Deputy Minister in the Prime Minister's Department Razali Ibrahim urged patience with regard to the ongoing investigation into 1MDB, even using words in Chinese to stress his point.

"In Chinese, we say man man lah, man man (slowly lah, slowly).  We will wait for the (outcome of the) matter, which is under investigation by the relevant authorities. God willing, the truth will be revealed," Razali told the Dewan Rakyat on Tuesday, 14 November.

The government treating 1MDB as a joke just shows how ridiculously selective investigations in Malaysia are.   It is obnoxious to expect Malaysians to wait even longer for a decision on a case involving multi-billion dollars that’s already been ongoing for years.

Worse, other countries have already investigated, charged and even jailed perpetrators involved in the 1MDB, while Malaysian authorities continue to drag their feet on the matter.

How much slower does the Deputy Minister expect investigations to slow down to?

His statement lays bare the sheer double standards of the government and authorities when it comes to investigating politically-linked scandals. If it’s an Opposition or parties critical of the Government, the authorities act with lightning speed. However, when the tables are turned, authorities are suddenly asked to go through things slowly.

The first police reports filed against 1MDB were done in 2014. In June 2015, the Home Minister said in Parliament that investigation papers had been referred to the Attorney- General in March. That was over two years ago, and the Attorney-General and the police are still passing the investigation papers between each other.

By comparison, the investigation into Penang Chief Minister Lim Guan Eng, started with a report to MACC on March 18 2016. Investigation papers were submitted to the AG in May and an arrest by MACC was made in June. It took MACC just two months to investigate and the AG just one month to decide on prosecution despite Lim Guan Eng having presented evidence to the contrary of the charges.

Why don’t we see this level of efficiency when it comes to scandals involving tens of billions of ringgit which implicated even the Prime Minister and his family?

Dismissive comments such as in the Deputy Minister’s speech prove just how little the government cares about upholding justice and protecting the interest of ordinary Malaysians. With billions of Malaysian public funds gone and allegedly funding the lavish lifestyles of others, we need to ask who the government are really defending – the people or crooks who are in power?

Wednesday, November 15, 2017

The MACC must not abscond from its constitutional duty to investigate the ample hard evidence of corruption, abuse of power and criminal breach of trust in 1MDB as confirmed by its own former senior officer

The Free Malaysia Today (FMT) reported on 10 November that ex-senior Anti-Corruption Agency (ACA) officer, Ramli Manan said there is ample evidence for the anti-graft agency to investigate the financial fiasco involving state investor 1MDB.

Ramli Manan said investigators had only to look into 1MDB-related court proceedings in Singapore and the United States’ Department of Justice (DoJ) reports to assist them in their probes.

Singapore’s investigation into the fund has resulted in the termination of BSI Bank’s license and the arrest of its bankers for assisting in laundering of 1MDB funds. Even as we speak, the Singaporean investigations still continue, with police now examining the role of Wall Street bank Goldman Sachs’ in setting up fraudulent bond offerings for the fund. The US Department of Justice investigations more explicitly state their investigations are aimed at recovering assets bought using funds laundered from Malaysia’s 1MDB.

“The evidence there is glaring and it could be of great assistance to MACC officers,” said Ramli, who retired as director of the Sabah ACA.

He further confirmed my criticism of the Malaysian Anti-Corruption Commission (MACC) last week that the MACC and the Royal Malaysian Police have different responsibilities and jurisdiction.  Ramli told FMT that “it is only the MACC that has the expertise and experience to carry out investigation on graft and abuse of power. Police only can probe Penal Code offences.”

The Minister in the Prime Minister’s Department in-charge of Integrity, Datuk Paul Low had on 1 November responded to me in Parliament that “investigations weren’t carried out because of existing investigations being done by the Public Accounts Committee (PAC), Bank Negara and the Police.”

The statement by the former Sabah ACA Chief only goes to prove that there could not be a more shameless and irresponsible reply from the Minister and the Government.

The MACC is clearly and willfully choosing to ignore readily-available evidence in order to protect those implicated in the multi-billion dollar scandal, including the Prime Minister and his family members.

We’d like to remind the MACC again of their role as an independent commission. Its actions should never be dictated or influenced by the actions of other authorities or agencies.  To prove that the MACC is indeed independent and not cowardly, it should immediately kick off its investigations into the massive shenanigans in the company and ensure the culprits who have caused billions of ringgit in losses pay for their heinous crimes.

Tuesday, November 14, 2017

Current Bandar Malaysia RFP likely to suffer same fate as its failed sale to Iskandar Waterfront Holdings and subsequent imaginary sale to Dalian Wanda Group

In my parliamentary question on 8 November I had asked the Ministry of Finance (MoF) for a simple update on the progress of Bandar Malaysia’s search for a new master developer.
Tony Pua minta Menteri Kewangan menyatakan berapa syarikat telah menyerahkan cadangan muktamad dalam tender semula projek Bandar Malaysia. Berapa antaranya adalah syarikat Fortune 500 dan bilakah keputusan tender tersebut akan diumumkan?

The new tender process for Bandar Malaysia’s developer comes following the spectacular collapse of the RM7.41 billion deal with the Iskandar Waterfront Holdings (IWH)-led consortium to acquire a 60% stake in Bandar Malaysia in May 2017.

Following that was another dramatic public relations disaster when the Prime Minister, Dato’ Seri Najib Razak failed to seal an improved multi-billion dollar Bandar Malaysia deal with China’s Dalian Wanda Group.

In attempt to save face and salvage the project, Bandar Malaysia’s owner, the MoF, launched a new request for proposals (RFP) to collect bids for a new master developer for the project.

The new RFP also included more stringent criteria including that the developer needed to be an affiliate of a Fortune 500 company and must have cumulatively generated RM50 billion in revenue in the last 3 consecutive years.

In the Finance Minister’s answer to my question, he only restated information which were already made known to the press for months. He said that the RFP process had been completed and listed out the same criteria that had been said before. He added that 8 companies had met these criteria and that a final decision will be announced soon.

The reply shows that all is clearly not going to plans with the re-bidding process of Bandar Malaysia.

When the RFP was first announced in May, the new Bandar Malaysia chairman and MoF Secretary-General Irwan Serigar Abdullah said that the RFP deadline would close on June 30 and the final decision would be made by July 14.

The RFP was finally launched on July 5, with a deadline on July 20.  The Singapore Straits Times had reported on July 25 that 7 Chinese state-controlled entities and two Japanese firms were in competition for the project. They included China State Construction Engineering Co Ltd, China Communications Construction Company (CCCC) from China and Daiwa House Industry Group and Mitsui Fudosan Co Ltd from Japan.

Then on August 23, Tan Sri Irwan Serigar updated Malaysians with his announcement that “6 companies have shown interest and visited the Bandar Malaysia project site”.

“We took them for a site visit and they need to submit their proposal by the end of this month,” he said.  However, Irwan said the government does not know how many companies, out of the six, will actually submit their proposals based on the RFP for the project.

Now, it is now 4 months after the RFP was announced and we have had no further updates as to who might become the master developer for the Bandar Malaysia.  All we have from the media and parliamentary responses is there are 6 to 8 companies who were perhaps interested in the project.

The delay and inconsistent announcements made however, points to a simple conclusion.  The Bandar Malaysia is no nearer to finding a new suitor than it did when it terminated the failed agreement with the IWH-led consortium.  The so-called interested parties were either not that interested, or were not willing to offer anything close to MoF’s over-priced valuation of Bandar Malaysia.

The MoF should stop daydreaming and start getting real.  The previous Bandar Malaysia “open tender” resulted only with the IWH-consortium winning the bid but failing to secure the necessary financing for the valuation to complete the transaction.   It follows to ask why would any global company in the right mind, offer anything more for Bandar Malaysia especially when they also know that MoF is rather desperate to make the sale?

Minister of Energy, Green Technology and Water confirms that 1MDB had no role in reducing electricity tariffs or costs, proving PM’s claim of massive savings completely baseless.

In his blog post prior to the Budget 2018 announcement, the Prime Minister Dato’ Seri Najib Razak had made the claim that 1MDB’s involvement in the renegotiation of lopsided Power Purchase Agreements (PPAs) had resulted in massive savings for Malaysians. He said that 1MDB’s participation in the energy industry had saved the country RM200 billion over the next 20 years.

However, the Minister of Energy, Green Technology and Water in his winding-up speech in Parliament on 9 November, said that 1MDB’s ownership of Tanjong Energy, Genting Sanyen and Jimah had nothing to do with the increase or decrease of electricity tariff rates or costs because 1MDB maintained the rates as stipulated by the final sales and purchase agreements.

Dato’ Seri Maximus Ongkili has now effectively clarified in Parliament that Najib’s claims are completely ridiculous.

Not only has the Minister stated without doubt that 1MDB’s participation has had no effect on the tariff rates or energy costs, he added that the cost savings that Najib has accredited to 1MDB have nothing to do with them either.

Ongkili said in his speech that the lower capacity rate financial (CRF) of RM6kw per month for 48 months, which resulted in RM1.6 billion in savings was a condition in the tender set by the Energy Commission. It was certainly not because of 1MDB’s noble generosity.

We are thankful that Dato’ Seri Najib finally admitted that those independent power producers (IPPs) were allowed to profit astronomically from the BN government of which he was part of before.  However, we can now also confirm that 1MDB has played no role to atone for the the above injustice.

Malaysians haven’t enjoyed a single sen in benefit as electricity tariffs have only increased and not decreased since 1MDB started acquiring these IPPs.  Worse, the 1MDB’s RM12.1 billion-misadventure in the power sector resulted in multi-billion ringgit losses when it was forced to dispose of its entire energy interests to a China outfit for a mere RM9.83 billion.

It is time for Dato' Seri Najib Razak to face the facts and deal with the billions of ringgit of losses and damage that 1MDB has caused to the tax-payers in our power sector, amongst other billions of ringgit of losses.

Wednesday, November 08, 2017

Is a switch from “Project Delivery Partner” to “Turnkey” model really to save on financing cost, or is there more than it meets the eye?

MRT Corp has recently announced its tender for the third phase of MRT project. The big changes to the tender conditions compared to the MRT 1 and 2 projects come as a big surprise to the infrastructure players and investment community.

The biggest change comes in the project delivery structure which has gone from a project delivery partner (PDP) model to a turnkey model. The PDP model used in the MRT 1 and 2 projects saw the participation of local companies who were to ensure the on-time delivery the project.

Under the turnkey model, however, a single contract is awarded for the entirety of the project, which is estimated to worth between RM40-50 billion. This model has similarly been used for the ECRL which has the China Communications Construction Company Ltd. (CCCC) as its turnkey developer. The CCCC is now responsible for building and financing of the entire project, which includes the hiring of subcontracts for different packages of the development.

The first question that needs to be asked is why the sudden switch to a turnkey model over the existing PDP model? The government has previously praised the delivery of MRT for being done ahead of schedule and purportedly under budget.

Under the revised scheme, MRT3 requires the winning bidder to provide at least 90% financing with an 8-year moratorium whereby no repayments on the principal and interest of the financing will be paid to the government. On top of that, it requires the repayment period to be no less than 30 years.

MRT Corp has said that the turnkey financing model is aimed at attracting foreign companies who may provide better financing options for the line. Dato’ Seri Shahril Mokhtar claimed that “if we utilise funds from say, DanaInfra… with an interest rate of about 5.1%... the borrowing cost will kill us… if foreign parties can give us 3% then why not, its good for us”.

Perhaps MRT Corp is trying to be disingenuous with their arguments.  How come the financing cost of DanaInfra didn't "kill" MRT1, MRT2 and LRT3?  While financing costs is indeed important, what is more important is the actual project cost.  If the actual project cost is say, 20% higher, then a 2% lower financing cost will still cost MRT Corp more in the end.

It is the same point we have raised for the ECRL project – what is the point of awarding the RM55 billion contract directly to CCCC without any open tender merely for 1% lower in financing cost, when the Government’s own consultants estimated the project to cost less than RM30 billion?

What’s more, the unprecedented stringent financing requirements seem intentionally designed to disqualify locally experience major infrastructure builders like Gamuda Bhd or MRCB.  Analysts interviewed by The Edge Financial Daily have cited the heavy financing burden as a huge barrier preventing the participation of Malaysian firms in the tender.

Unlike the MRT 1 and 2 projects that saw the participation of Malaysian at all levels of the project, it now seems much less likely for local firms to participate in MRT3, unless they form consortiums or are hired as subcontractors by the turnkey developer. Why is the Government so intent on hiring foreign contractors when we already have all the expertise locally?

What is even more suspicious is the fact that MRT2 is only due for completion in 2022, and yet the Prime Minister has brought forward the completion date for MRT3 to 2025 from 2027. Why the sudden rush to award these contracts?

All the above questions only go to prove that there’s more than it meets the eye with the latest ‘mysterious’ decision to switch the project model from the much ‘praised’ PDP to the turnkey cum financing model.  The cost of the switch might just end up a whole lot more for the Malaysian tax-payers at the end of the day – what is the purpose and who are the real beneficiaries?

Another ‘top secret’ 1MDB bailout by 1MDB via TRX land buyback by the Ministry of Finance

During the last parliamentary session, I had asked the Minister of Finance what is the cost and size of the land in Tun Razak Exchange (TRX) which its wholly-owned subsidiary, Aroma Teraju Sdn Bhd acquired from 1MDB in 2015.

The reply which I had received from the Dato’ Seri Najib Razak on 31 July, was that the information was protected by a confidentiality clause between the buyer and the seller.

The answer is ridiculous because both entities are wholly-owned by the Ministry of Finance, which in turn is accountable to both the Parliament and the public at large, and hence such information should never be a secret. This is especially since the price of a piece of land is in no way a threat to national security, and the information is certainly not protected by the Official Secrets Act.

Therefore, for the current sitting, I had asked why the land size and price for the purchase of Tun Razak Exchange (TRX) land by MOF-owned Aroma Teraju from 1MDB cannot be disclosed even though both companies were wholly-owned subsidiaries of MOF.

Tony Pua minta Menteri Kewangan menyatakan apa sebabnya keluasan dan harga pembelian tanah Tun Razak Exchange (TRX) oleh syarikat Aroma Teraju daripada 1MDB tidak boleh diumumkan walaupun kedua-dua syarikat tersebut merupakan anak syarikat milik penuh Kementerian Kewangan
Once again, in the reply dated 6 November 2017, I received utter nonsense from the Finance Minister which justified his being awarded “Asia’s Worst Finance Minister 2016” by FinanceAsia.

Dato’ Seri Najib Razak responded by saying this was because of the agreement’s confidentiality clause to protect the commercial considerations of both parties. He goes on to say that these terms are consistent with the key terms used in the market among other similar transactions.

The Minister chose to ignore is that both Aroma Teraju and 1MDB are wholly-owned by MOF. What is the purpose of this secrecy when both parties in the agreement are owned by the Government?

There is only one reason for invoking this confidentiality clause, and it has nothing to with the purported “commercial considerations”. It is to cover up the fact that MoF paid over-the-top to buy back a fraction of the prime land it had sold at bargain basement prices to 1MDB in 2010.

Based on the 2011 1MDB Financial Statements, the 70 acre TRX land was acquired from the Government at the value RM194 million, or approximately RM64 per square feet in 2010.

However, in the same year that Aroma Teraju acquired the above-mentioned piece of land from 1MDB, the latter also sold other parcels of TRX land to other government related institutions.  Lembaga Tabung Haji acquired 1.6 acres for RM188.5 million or more than RM2,800psf.  Affin Bank, a subsidiary of Lembaga Tabung Angkatan Tentera (LTAT), acquired 1.25 acres for RM255 million or nearly an eye-popping RM4,700psf.

If Aroma Teraju paid any where near the prices paid by Tabung Haji or Affin Bank, it would mean that Malaysian tax-payers would be been ripped off beyond their wildest imagination.  Very simply, 1MDB purchased land from the Government at RM64psf and sold a fraction of the piece of undeveloped land back to the Government five years later at an exhorbitant thousands of ringgit per square feet.

I challenge the 1MDB, Arul Kanda or the Finance Minister to deny my allegations with facts and figures. Otherwise, it would merely confirm that the secrecy over a simple sales and purchase agreement between two government entities is really to cover up another one of the daylight robberies against the Malaysian tax-payers to bail out the debt-stricken 1MDB.

Tuesday, November 07, 2017

The Malaysian Anti-Corruption Commission needs to grow a spine and really stand up to corruption.

I had asked in Parliament why the MACC had announced in June that it would not be carrying out investigations regarding the misappropriation of funds and abuse of power in the 1MDB scandal.
Tony Pua meminta Perdana Menteri menyatakan apakah sebabnya Ketua Pesuruhjaya Suruhanjaya Pencegah Rasuah Malaysia (SPRM) mengumumkan pada bulan Jun 2017 bahawa pihak SPRM tidak akan menjalankan siasatan ke atas ke penyelewengan dan penyalahgunaan kuasa dalam skandal 1MDB?

The Minister in the Prime Minister’s Department in-charge of Integrity, Datuk Paul Low replied on 1 November that “investigations weren’t carried out because of existing investigations being done by the Public Accounts Committee (PAC), Bank Negara and the Police.”

There could not be a more shameless and irresponsible reply from the Minister and the Government.

The PAC – which barely scratched the surface of the 1MDB scandal, has no prosecutorial powers.  Bank Negara Malaysia, on the other hand, was investigating 1MDB purely from the Financial Services Act and certainly did not deal with the parties who had profited from the scandal. 

At the same time, while the Police may have been investigating the criminal elements in 1MDB, the MACC has powers, laws and jurisdictions which are completely different from the Police to tackle corruption cases.

That was the whole point of the Parliament passing the MACC Act in the first place, so that there is a dedicated and independent commission to tackle the scourge of corruption and not let the burden be shouldered by the Royal Malaysian Police. What type “independent commission” worth its salt is MACC, if it leaves investigations, especially a scandal of such scale to other agencies?

In January this year, MACC commissioner Datuk Dzulkifly Ahmad warned corrupt politicians to “be careful”. He said he wasn’t afraid of protected individuals and would launch investigations without fear or favour. “Just you wait,” he had warned politicians.

Why is the MACC and Datuk Dzulkifly Ahmad, after all its showboating, so afraid of investigating the country’s biggest and most blatant corruption scandal?

Malaysians have been waiting long for MACC to launch its investigations into 1MDB especially after similar investigations have already begun in the US, Switzerland and Singapore. Just this weekend, even 1MDB-linked Prince Turki of Saudi Arabia was hauled up as part of an anti-corruption sweep in his own Kingdom.

In Malaysia, multiple reports have been lodged with the MACC regarding the 1MDB scandal. These included reports filed in December 2014 by then UMNO Batu Kawan Division Deputy Chief Datuk Khairuddin Abu Hassan and more recently, a Pakatan Harapan Youth-linked NGO in July this year.   Hence it is a serious breach of MACC’s duty for failing to look into complaints of corruption.

These submitted reports were to be evaluated before the Commission’s Information Evaluation Committee to determine whether there were elements of corruption or not. If elements of corruption are found, it is imperative that an MACC investigation is opened before being referred to the AG for legal prosecution.

Was the above process conveniently ignored in MACC’s special treatment for 1MDB?  Was this a condition for Datuk Dzulkifly Ahmad to be rapidly promoted to be appointed, less than 2 years ago, to be the Chief Commissioner in the first place?

It is preposterous for an independent commission like MACC to pass on its investigation to other agencies. Each authority has a different mandate to investigate, so it is entirely cowardly for MACC to turn a blind eye and let other agencies look into it.

Until the MACC finally grows a spine and properly considers reports against 1MDB, the commissioner's boastful warnings will remain in Malaysians’ eyes as baseless rhetoric.

Malaysians are stunned that failed 1MDB CEO, Arul Kanda is even better placed today to take over Khazanah’s Managing Director role in the near future.

According to the recent Singapore Straits Times’ report on 2 November 2017, the prospects of a Khazanah outsider such as Arul Kanda to come into the position is more likely following the resignation of Tan Sri Nor Mohamed Yakcop from Khazanah's board.

The Khazanah panel overseeing the leadership succession was until recently headed by its former deputy chairman, Tan Sri Nor Mohamed Yackop, who recently resigned from the fund following the completion of a Royal Commission of Inquiry into multi-billion dollar losses at Malaysia's central bank stemming from foreign exchange trading in the 1990s.

The Straits Times reported that senior Khazanah sources said that Mr Nor Mohamed was a strong advocate for Mr Azman's replacement to come from within Khazanah, and his departure could strengthen the push by vested interest groups to get an outside candidate.

Apparently senior politicians and well-connected business people close to Arul are lobbying Prime Minister Dato’ Seri Najib Razak who, as Khazanah's chairman, would have the final say on who replaces Mr Azman.  It is not hard to imagine Najib giving the job to the man who has willfully bent over backwards to defend his image and paint 1MDB as a success.

However, appointing Arul Kanda to lead Khazanah would only be an absolute disaster for the sovereign wealth fund.

Arul Kanda has had an utterly shameful record helming 1MDB. The debt stricken fund is supposed to be saved with the “rationalisation plan” he masterminded. However, to date, 1MDB has only found itself in a deeper hole with no sight of the end of the tunnel.

1MDB’s attempt to sell 60% of Bandar Malaysia was an abject failure. The Ministry of Finance had to terminate the contract because of the failure of the purchaser to make payments according to schedule despite repeated extensions.  To rub salt onto would, it was the Minsitry of Finance which refunded the RM741 million ‘deposit’ despite it being 1MDB which received the monies.  The fact that Arul Kanda was sacked by the Ministry of Finance from Bandar Malaysia Sdn Bhd practically says it all.

Just two weeks ago, I had reminded the Prime Minister that 1MDB’s sale of power assets to China General Nuclear Corporation incurred RM2.3 billion in losses. 1MDB’s reply, drafted by Arul Kanda himself, had tried to ‘erase’ the losses with an alleged RM2.13 billion in dividends received by the company.

However, the 1MDB President and CEO conveniently forgot to also include the interest cost which 1MDB had incurred to finance the acquisition of the power assets.  As I said before, only a half-baked CEO would say that it’s made money off dividends without accounting for the interest bill.

While being exceedingly creative with the accounts on its own should have disqualified Arul Kanda from even being considered, what is worse is his brazen lies told to the Public Accounts Committee (PAC) with regards to mysterious assets owned purportedly owned by 1MDB in its overseas subsidiaries.

For example, he has continued to insist on the monetisation of US$1.3 billion worth of investment ‘units’ in Singapore even though its subsidiary that holds the units has already been uncovered as a complete scam.

Today we know that the entire redemption exercise was a Ponzi-like round-tripping exercise using part of the proceeds from a Deutsche Bank loan to pretend that it’s the receipt from the ‘units’ redemption exercise.

Malaysians must protest the fact that a man who has proven incompetent and devoid of integrity is even considered for the post of Managing Director at Khazanah.  If 1MDB, with debts up to RM50 billion at its peak could be brought to ruins, what more could happen at the RM145 billion Khazanah Nasional.

Friday, November 03, 2017

Najib’s toll ‘freebie’ election goodie to cost Malaysians billions of ringgit

In an interview with TV3 Nightline, Second Finance Minister Datuk Johari Abdul Ghani said that PLUS would have to be compensated to the tune of RM102 million per year for abolishing the Batu Tiga and Sungai Rasau tolls and RM8 million for the Bukit Kayu Hitam toll. That’s a total of RM110 million per year just to PLUS. The compensation for the Eastern Dispersal Link (EDL) was said to be RM8 million, going to current concessionaire MRCB.

The above will cost the government RM118 million per year just to abolish these four tolls.

The concessions for all four tolls expire in 2038. Assuming if the compensation doesn’t increase over time, it will still cost a whopping RM2.36 billion.  However, this compensation amount will be even higher when the compensation is calculated based on forecast toll usage in the future.

Whether the compensation is given out in cash or through extensions of the concessions, the person footing the bill will still be the rakyat. That’s RM2.36 billion that could be used to benefit all Malaysians and not just help BN win over voters in the 3 states of Selangor, Kedah and Johor.

Let’s not forget that the government has already compensated toll concessionaires before when they have announced halting toll rate hikes in past Budget speeches. Each one of these populist moves only ends up costing the government and Malaysians more and more. The Prime Minister’s toll ‘freebie’ is no freebie at all.

If the Government is serious about making tolls more affordable for Malaysians, they’d take Pakatan Harapan’s advice. The Pakatan Harapan manifesto has called for the abolition of highway toll in stages via the restructuring and renegotiation of the toll agreements with the concessionaires.

Nearly all of these agreements contain clauses which allows the Government to expropriate these highways based on agreed formulas.  And in many circumstances, compensating toll concessionaires based on loss revenue as what the BN government is doing, costs a whole load more than just expropriating the highways outright.

For example, between 1990 to 2015, the compensation for Lebuhraya Damansara Puchong (LDP) already amounts to RM1.05 billion even though the actual cost of constructing the highway, including interest amounts to only RM1.3 billion.  And there’s 13 more years to the concession period for compensation to be paid and for the concessionaire to make outrageous profits.

We call upon the Najib administration to stop fleecing Malaysians with not-at-all-free “free” tolls and concessionaires who continue to make astronomical profits at the expense of the rakyat.

Thursday, November 02, 2017

If Tan Sri Apandi Ali is serious about 1MDB, why has it taken him forever to “instruct” the Police to continue their investigations?

After untold months of utter silence and inaction, two days ago, Attorney-General (AG) Tan Sri Apandi Ali suddenly said that investigation papers into 1MDB were still on-going.

He said further investigation into 1Malaysia Development Berhad (1MDB) is necessary following “the lack of evidence in certain areas”.

“When the investigation papers are referred to us, we go through them. We find a lack of evidence. So, we give instruction that the team should carry out investigation in certain areas (to the Police)... About 20 to 25 per cent of the investigation papers need to be reviewed,” he said at a press conference.

If he really needed more evidence, why did Tan Sri Apandi Ali reject the request for mutual legal assistance requests from the Swiss Attorney General?  In fact, why haven’t Tan Sri Apandi Ali sought assistance from the United States Department of Justice (US DOJ) for more information on the tens of billions of ringgit laundered from 1MDB funds?

Instead, in June this year, Tan Sri Apandi Ali chose to dismiss the evidence put forward by the US DOJ by accusing them of being “politically motivated”. The question for our AG is, did he even investigate those claims before concluding that they were “politically motivated”?

Similarly, the police are complicit in this shameful game of passing the parcel. In September, the newly appointed Inspector-General of Police, Dato’ Seri Mohd Fuzi Haron announced that the police had closed its investigations and wouldn’t reopen them unless instructed by the PAC or the cabinet. Is the new IGP so spineless that he will not investigate crimes without the green light of his political masters?

The AG too has only confirmed the continuing investigations because of Minister in Prime Minister’s Department, Datuk Seri Azalina Othman’s reply in Parliament on 30 October that they were still ongoing.

The Malaysian authorities seem to think that the 1MDB issue is a big joke given the way they’ve been handling it. Investigations start and close and get reopened by different authorities, yet no one seems to be getting closer to any firm conclusions.

In Parliament, questions on 1MDB get rejected because matters are either in court or under investigations. Which court matter or investigations they are rejected on are never revealed.

It cannot be clearer that all the institutions enshrined in our constitution to protect the interest of the people from criminals such as those who have robbed 1MDB of billions of ringgit have been compromised by the top leadership of Barisan Nasional.

The people of Malaysia have a heavy responsibility in the coming general election as only they can punish those who have grossly abused their power, accrued outrageous wealth for themselves and failed Malaysians who have placed their trust in them.

Wednesday, November 01, 2017

We either have the stupidest Finance Minister in the world or one who is trying his very best to pretend to be the stupidest

I have asked the Minister of Finance to state the current value of remaining investment ‘units’ owned by 1MDB subsidiary Brazen Sky Limited and to name the bank or financial institution that was the ‘custodian’ of those investment ‘units’.

Tony Pua meminta Menteri Kewangan menyatakan baki nilai terkini pelaburan ‘unit’ yang dimiliki oleh anak syarikat 1MDB, Brazen Sky Limited dan nama institusi bank atau kewangan yang kini menjadi ‘custodian’ kepada pelaburan tersebut.

This question was rejected by the Speaker during the last sitting in July with the utterly ridiculous excuse that it was “buah fikiran” or basically a figment of my imagination.  I’m grateful that the second attempt at posing this question to the Finance Minister has been accepted.

However, my joy was shortlived.  I’ve received the reply dated 30 October 2017 from the Minister of Finance yesterday (attached).  It was the stupidest “pretend to be stupid” reply I have ever received from any Minister in my 9 and the half years in Parliament.

My question asked what is the current value of “units” and who is the custodian bank.  The reply start with “rancangan 1MDB untuk menyelesaikan hutang syarikat adalah seperti berikut…” or “the plan to resolve 1MDB’s debts are as follows”.

And the Minister goes on to tell the story of how selling the Edra Energy, 1MDB’s real estate properties and the investment ‘units’ will pay for the 1MDB debts.  He might as well have added that the sun rises from the east and sets in the west.

The Minister’s answer could have been less than 10 words, and it would have answered my question perfectly. Value of units, and name of bank.

Is the Finance Minister that stupid that he could not understand simple English or Malay?  Or he is trying his best to pretend to be a complete nitwit so that he doesn’t have to answer a very simple question from a Member of Parliament?  Either way, the Finance Minister has show utter contempt for the Parliament.

Malaysians have the right to know the status of USD940 million worth of investment ‘units’ held by Brazen Sky Ltd.  It’s not like the question has never been answered in Parliament before.

Current and former finance ministers, as well as 1MDB, itself had openly stated that the company had investments in the form of ‘units’ held with a ‘custodian bank’ previously valued at US$2.3 billion, of which a substantial portion has apparently been redeemed.

1MDB has in April this year, further emphasized that the investment ‘units’ would be “monetized” to repay Abu Dhabi’s IPIC the sum of US$1.2 billion.  Hence, it is an extremely valid question to ask what is the current value of these units which are previously held in BSI Bank, Singapore.

However, more than a year after BSI lost its license in Singapore, and we are still looking for the same answers regarding Brazen Sky’s accounts. Who is its new ‘custodian’ bank and what is the status of its units?

Or are Malaysians to assume that the refusal of the Finance Minister to answer the above question is evidence that the ‘units’ are indeed a fraud as suspected with little or no value, and it’s current not held in any bank around the world?